February 18, 2013

HISTORY ENDS WITH A WHIMPER:

Arms sales by the world's largest weapons makers fell in 2011, representing the first decline since the mid-1990s as austerity measures and a reduced U.S. presence in Iraq and Afghanistan hit military spending.

According to the Association of American Railroads, freight trains are four times more fuel efficient than trucks, with 75% fewer carbon emissions for the same distance (it has a handy calculator here, if you want to plug in a few actual journeys). The video above shows off some new diesel locomotives that General Electric says are particularly efficient, using "11% less fuel than the existing locomotive average in North America."

THERE ARE NO DIFFERENCES:

The reason to worry about the deficit today -- and, more to the point, the trends in government spending and taxation that drive it -- is that the most worthwhile kinds of government spending are getting squeezed out.

The key insight behind this theory is that some forms of government spending rise automatically and rapidly, and are very politically difficult to cut, while other forms of government spending need congressional approval every single year and have few constituencies to protect them. In the first category are Medicare and Medicaid and Social Security, all of which are projected to consume much more of the federal budget in the coming years. In the second category are things like education funding, research and development, stimulus, infrastructure investment, and even the military. And the fear is the first category is squeezing out the second category.

As David Leonhardt notes in 'Here's the Deal," the federal government has been tracking spending on "Major Physical Capital, Research and Development, and Education and Training" since 1962. Over that period, it's fallen from around 2.6 percent of GDP from the mid-60s to the mid-80s to 1.8 percent from the '80s until the financial crisis. The stimulus pushed it above 2 percent again, but that's a temporary lift. Between the cuts from the 2011 Budget Control Act and the possible cuts from the sequester, this spending -- which is essentially the investments we make in our future -- is likely to be driven to historic lows. Meanwhile, an Urban Institute study finds that "looking solely at the federal budget, an elderly person receives close to seven federal dollars for every dollar received by a child."

"Growth of entitlements is crowding out programs for younger families and their kids and are likely to impair social mobility," says Isabelle Sawhill, co-director of the Center on Children and Families and the Budgeting for National Priorities Project at Brookings.

FEW PRESIDENTS HAVE EVER HAD SUCH AN EASY OPPORTUNITY.

The proposed northern extension of the nearly 2,000-mile Keystone XL pipeline would connect Canada's oil sands to refineries around Houston and the Gulf of Mexico, replacing Venezuelan heavy crude with similar Canadian grades.

...to destabilize an enemy regime and benefit an ally. Of course, this president hates making decisions.

OSSIFICATION IS NOT A CONSERVATIVE VALUE:

When Reagan cut rates for everyone, the top tax rate was 70 percent and the income tax was the biggest tax most people paid. Now neither of those things is true: For most of the last decade the top rate has been 35 percent, and the payroll tax is larger than the income tax for most people. Yet Republicans have treated the income tax as the same impediment to economic growth and middle-class millstone that it was in Reagan's day. House Republicans have repeatedly voted to bring the top rate down still further, to 25 percent.

A Republican Party attentive to today's problems rather than yesterday's would work to lighten the burden of the payroll tax, not just the income tax. An expanded child tax credit that offset the burden of both taxes would be the kind of broad-based middle-class tax relief that Reagan delivered. Republicans should make room for this idea in their budgets, even if it means giving up on the idea of a 25 percent top tax rate.

When Reagan took office, he could have confidence in John F. Kennedy's conviction that a rising tide would lift all boats. In more recent years, though, economic growth hasn't always raised wages for most people. The rising cost of health insurance has eaten up raises. Controlling the cost of health care has to be a bigger part of the Republican agenda now that it's a bigger portion of the economy. An important first step would be to change the existing tax break for health insurance so that people would be able to pocket the savings if they chose cheaper plans.

Reagan was a New Dealer and believed in defined benefits. Modernity requires defined (and mandated) contributions.